PROMISSORY NOTE
The Maximum Aggregate Note Amount
is: US $1,000,000.00 Date: as of July _ , 1998
In this Note, the words "the Lender" mean The Venezuela Recovery Fund N.V. The
undersigned" shall mean New Era Foods, Inc.
1. Payment of Note Amount.
For value received and pursuant to the terms of a Term Sheet annexed to a Fee
Letter Agreement dated as of July 14, 1998 between the Lender and the
undersigned, the terms and conditions of which are incorporated herein by
reference, the undersigned promises to pay to the order of the Lender the
principal amount of each loan or extension of credit (each an "Advance")
together with accrued interest thereon on the Maturity Date of such Advance;
provided, however, that no Advance shall be drawn-down which would extend beyond
the expiration date of the facility which is one year from the date of this
Note. Advances shall be in a minimum amount of U.S.$50,000.00.
Within the limits of the Note Amount, the undersigned may borrow, repay and
reborrow subject to the terms and conditions set forth herein and in the Term
Sheet and Fee Letter Agreement. This Note shall (i) also benefit from the
unconditional Guaranties to be issued by Synergy Brands Inc. and Tenda
Corporation and (ii) be secured by a first priority security interest in all of
the undersigned's personal property, including its inventory and accounts
receivable. All Advances shall also be secured by negotiable warehouse receipts
issued to the order of (or duly endorsed to) the Lender and the full set of
negotiable bills of lading shall be issued to the order of the Lender.
2. Payment of Interest.
a. The undersigned will pay interest on the unpaid principal amount of
each Advance from the date thereof until repaid in full at 12% per
annum for each Interest Period, as that term is hereafter defined.
b. Interest shall be computed for the actual number of days elapsed on the
basis of a 360 day year. Interest shall be payable in arrears on the
last day of each month during the Interest Period applicable to each
Advance. In addition, after maturity of any Advance made pursuant to
this Note or demand for payment thereof, interest shall-be payable on
demand.
c. Overdue portions of principal or interest on the Note Amount shall bear
interest for each day from the due date thereof until paid in full at a
rate per annum equal 3.00% above the rate of interest on the Advance,
such interest to be payable on demand.
d. The proceeds of all Advances shall be made available to the undersigned
in immediately available funds by transferring the funds in accordance
with the undersigned's instructions. Advances require at least two
business days' advance notice. As used in this Note, the term "business
day" shall mean any day on which the Lender is open for business.
e. Each Advance, all maturity dates, interest rates and principal
repayments thereof shall be recorded on the internal records of the
Lender which shall be conclusive absent manifest error. The Lender
shall have no duty to reflect any Advance or the terms and conditions
thereof on the grid annexed to this Note. However, prior to any
transfer of, or any action to collect this Note, the then outstanding
principal amount and interest rate on the Advances shall be endorsed on
the grid annexed to this Note, together with the date of such
endorsement. Any such endorsement shall constitute prima facie evidence
of the accuracy of the information so endorsed.
f. Any Advance may be prepaid at any time in whole or in part by the
undersigned on the last day of an Interest Period, provided it shall
have given the Lender prior written notice thereof at least fifteen
days prior to any such prepayment. Such notice shall be irrevocable.
-E-1-
3. Payment of Costs and Expenses.
The undersigned agrees to pay the Lender's costs and expenses (including
attorneys' fees) incurred by it in connection with the administration or
enforcement of this Note and in collecting any amounts due hereunder.
4. Place and Means of Payment; Holidays,
Payment of the Note Amount and interest shall be made at the Lender's office in
New York City or at such other office as may be designated by the Lender in
lawful money of the United States of America and in immediately available funds.
Whenever any payment to be made pursuant to this Note shall be due on a
Saturday, Sunday or other day on which banks are authorized to close under the
laws of the State of New York ' such payment may be made on the next succeeding
business day and any extension of time shall be included in computing interest,
if any, with respect to such payment.
5. Acceleration.
a. The Bank may in its sole discretion and at any time upon its first
demand made to the undersigned declare all amounts payable pursuant to
this Note immediately due and payable, whereupon the same shall become
so due and payable if any of the following events shall occur:
the undersigned or any guarantor or endorser of this Note or any
institution which has provided collateral security for the obligations
assumed hereby or otherwise placed funds with the Bank (A) defaults in
the payment when due of, or otherwise defaults in the performance of,
any obligation to the Bank or to any other person or entity; (B) has
made or makes to the Bank any representation or warranty or any
statement that proves to have been incorrect or misleading in any
material respect when made; (C) the undersigned (and not a guarantor)
fails to pay when due any other indebtedness for borrowed money, the
maturity of any such indebtedness is accelerated or an event occurs
which, with notice or lapse of time or both, would permit acceleration
of such indebtedness; (D) is dissolved or is a party to any merger or
consolidation or sells or otherwise disposes of all or substantially
all of its assets without the written consent of the Bank; (E)
challenges, or institutes any proceedings, or any proceedings are
instituted to challenge, the validity, binding effect or enforceability
of this Note, any guaranty or endorsement of this Note or any other
obligation to the Bank; (F) makes any payment on account of any
indebtedness subordinated to this Note in contravention of the terms of
such subordination; (G) fails to furnish information upon request of
the Bank, or permit inspection of its books and records by the Bank
upon reasonable notice having been given therefor; or (H) the
undersigned (and not a guarantor) creates, without the written consent
of the Bank, a security interest in or lien upon, or an attachment or
levy is made upon, any of its assets, or a judgment is rendered against
it which would have a material adverse effect on its assets, business
or properties.
b. All amounts payable pursuant to this Note shall be . immediately due
and payable, without presentment, demand, protest or notice of any
kind, if the undersigned (or any of the undersigned) or any guarantor
or endorser of this Note (i) becomes insolvent or unable to meet its
debts as they mature or is generally not paying its debts as they
become due, or suspends or ceases its present business, or a custodian,
as defined in Title 11 of the United States Code, of substantially all
of its property shall have been appointed or taken possession, or (ii)
commences, or has commenced against it, a case under such Title 11, or
any proceeding under any other federal or state or foreign bankruptcy,
insolvency or other law relating to the relief of debtors, the
readjustment, composition or extension of indebtedness or
reorganization.
6. Definitions.
As used in this Note, the following term shall have the following meaning:
a. "Interest Period" shall mean the period commencing with any Advance and
continuing for 30, 60 or 90 days as the undersigned may request from
time to time and as the Lender may agree.
-E-2-
Notwithstanding the foregoing, each Interest Period that would
otherwise end on a day that is not a business day shall end on the next
succeeding business day (or, if such next succeeding business day falls
in the next succeeding calendar month, on the next preceding business
day).
7. Waivers; Governing Law; Jurisdiction; Service of Process.
a. THIS NOTE SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BETWEEN
THE LENDER AND THE UNDERSIGNED.
b. The undersigned waives presentment, protest, notice of dishonor and the
right to assert in any action or proceeding with regard to this Note,
offsets or counterclaims which the undersigned may have. No failure or
delay by the Lender in exercising any right hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right
preclude other or further exercises thereof or the exercise of any
other right.
c. The undersigned agrees that any suit, action or proceeding
("Proceedings") arising out of or in connection with this Note may be
brought in any New York State or U.S. Federal court sitting in New York
City or such other forum as the Lender may select and submits for
itself and its assets to the non-exclusive jurisdiction of each such
court and waives any objection which it may have now or hereafter to
the laying of the venue of any such Proceedings in any such court and
any claims that any such Proceedings have been brought in an
inconvenient forum.
d. The undersigned agrees that any complaint, judgment or other notice of
process shall be sufficiently and, effectively served on it if a copy
thereof is mailed by registered or certified mail, postage prepaid,
return receipt requested to it at its address indicated on the
signature page hereof, or at such other address as the undersigned
shall notify the Lender in writing.
e. The undersigned agrees that a judgment in any Proceeding to which the
time for filing an appeal has expired, or-if appealed, has been decided
on appeal in a final judgment or judgments, brought in any New York
State or U.S. Federal court sitting in New York City shall be
conclusive and binding upon it and may be enforced in any other courts
to the jurisdiction of which it is or may be subject by a suit upon
such judgment; a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of its indebtedness.
-E-3-
f. The submission to the above-mentioned jurisdiction shall not (and shall
not be construed so as to) limit the right of the Lender to take
Proceedings against the undersigned in whatsoever jurisdictions shall
to it seem fit nor shall the taking of Proceedings in any one or more
jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not.
New Era Foods, Inc.
By:_______________________
Title:
By:________________________
Title:
Address: 40 Underhill Blvd.
Syosset, NY 11791
-E-4-
ATTACHMENT TO PROMISSORY NOTE - REVOLVING BASIS
IN THE MAXIMUM AMOUNT OF-US $1,000,000.00.
BETWEEN
THE VENEZUELA RECOVERY FUND N.V.
AND
NEW ERA FOODS, INC.
UNPAID
DATE INTEREST AMOUNT AMOUNT PRINCIPAL DATE NOTATION
OF RATE OF ADV. OF BALANCE OF MADE BY/
ADVANCE (%p.a.) REPAY OF LOAN MATURITY DATE
-E-5-